The difference between Commodity and Cargo.
Aren’t they the same, you may ask? The short answer is NO..There is a difference between Commodity and Cargo..
In economics, cargo or freight are goods or produce being conveyed – generally for commercial gain – by ship, boat, or aircraft, although the term is now often extended to cover all types of freight, including that carried by train, van, truck, or intermodal container.
The term cargo is also used in case of goods in the cold-chain, because the perishable inventory is always in transit towards a final end-use, even when it is held in cold storage or other similar climate-controlled facility.
Multimodal container units, designed as reusable carriers to facilitate unit load handling of the goods contained, are also referred to as cargo, specially by shipping lines and logistics operators. Similarly, aircraft ULD boxes are also documented as cargo, with associated packing list of the items contained within. When empty containers are shipped each unit is documented as a cargo and when goods are stored within, the contents are termed as containerised cargo.
Commodity may be defined as a raw material or product that is traded, such as ores, grain, coffee etc.
Commodity becomes Cargo when it enters the transportation realm. Cargo is what is transported.
There are several terms associated with Commodity and Cargo.
You may have heard the term “Commodity Trading”, never “Cargo Trading”. Commodity is what is being bought and sold.. How and when commodity becomes cargo will be decided after the trade.
Trading is done mainly using International Commercial terms otherwise known as Incoterms®.
You may have also heard the term “Cargo Operation or Handling”, never “Commodity Operation or Handling”.This is because cargo is what is being transported and handled on board the ships, in port and on the roads. As long as a “commodity” is being transported, it is referred to as “cargo”.
You may have also heard the terms “Commodity Brokers”, “Commodity Traders”, and “Cargo Brokers”. Commodity brokers connect sellers and buyers for any specific commodity and Cargo Brokers connect “Commodity Traders” who trade in commodities and Ship owners for the carriage of the commodities.